INTERCURE is predicting revenues of C$100m (£59m) over the coming year after reporting record sales in its third quarter.
The Israel-based medical cannabis company reported sales of C$25m (£14.67m) in the three months to September 30, up 36% on its previous quarter and over 170% on the same period a year earlier.
It attributed the spike in sales to its increased market share, growing consumer demand for cannabis products and the expansion of its medical cannabis dispensing operations.
InterCure, founded in 1994, recently became one of the first Israeli companies to receive an EU GMP licence, and its wholly-owned subsidiary Canndoc is reportedly Israel’s largest licensed cannabis producer.
It has been developing, cultivating and selling its own branded products since 2008, and has grown from 10 employees to around 320 since then.
In 2012 it became the first Israeli company with a medical cannabis licence to list on the Tel Aviv stock exchange, and in 2018 former Israeli Prime Minister Ehud Barak became its Chairman.
The Israeli Cannabis Market
Israel has one of the most developed cannabis industries outside of North America and became one of the first countries in the world to legalise medical cannabis in 1996, with far wider prescription initiatives being rolled out in 2011.
According to figures from Prohibition Partners, there were a record 60,000 medical cannabis users, representing around 0.6% of the population, in Israel in 2020. This number is now thought to have grown to around 80,000.
A bill to legalise the sale and purchase of cannabis for personal use for those over the age of 21 was rejected by the government in July this year, but Israel has already largely decriminalised recreational use.
According to the draft legislation, 27% of Israel’s adult population now consume cannabis in some way.
Consolidation Strategy
CEO Alexander Rabinovitch says Intercure now represents around 30% of Israel’s medical cannabis market after adding two new fully licensed dispensaries to its estate during the quarter as part of its acquisition of retailer Cannomed.
This acquisition reportedly forms part of Intercure’s consolidation strategy in the Israeli market, following its recent acquisition of Better.
He added that it now sells over one ton of medical cannabis annually through 20 pharmacies across Israel, 14 of which are fully licensed to sell medical cannabis, four of which it acquired after the reported financial period.
Speaking to investors following the release, Mr Rabinovich said that the other six pharmacies were at various stages of the licensing process, each depending on the unique restrictions of their location.
“The process really depends on the district, Israel is divided into six districts and every district has its own kind of Sheriff,” he explained, adding that these can take anywhere from six months to over a year.
The quarter was also reportedly Intercure’s fifth consecutive period of positive operating cash flow coming in at C$4m (£2.36m), while EBITDA came in at C$6m (£3.54m).
In light of the positive results, Mr Rabinovitch said he expects ‘growth to continue in the fourth quarter and through 2022’, and said he anticipated ‘an annualized revenues run rate of C$100m, increased gross profits and adjusted EBITDA run rate of C$23m’ over the next year.
Canadian Listing
During the quarter Intercure also successfully launched on NASDAQ, marking the third market alongside the Toronto and Canadian stock exchanges on which its shares are traded.
Mr Rabinovitch says that this additional listing will aid Intercure in its international expansion ambitions, which he believes will be boosted by reforms on the exportation of pharmaceutical-grade cannabis currently underway in Israel.
These will allow Intercure to export its GMP-approved products in bulk for the first time, a development expected to have a “tremendous positive effect” on its international business.
According to the company, its pharmaceutical grade distribution operation already covers 1% of the Israeli, UK and German market.
